Financing worked out with a New York investment fund has cleared the way for National Renenwable Energy Corp., known as NARENCO, to move into large solar project development.

NARENCO will build six farms to be built over the next several months, with construction on at least one and probably two five-megawatt projects starting before the year ends.

President Dennis Richter says its an important move for the Charlotte-based solar company. Until now, the majority of its solar work has involved building projects for other developers.

It has built about 5 megawatts worth of projects — it’s largest the 3.5 megawatt Ararat Rock Solar Project developed by Cornelius’O2 Energies. It has so far designed and developed just about a megawatt of solar capacity, Richter says.

“Working with investors and developing projects ourselves helps us control our own destiny,” Richter says.

The Engineering, procurement and construction market is becoming more crowded and competitive. Moving up the food chain to project finance and development allows NARENCO to increase its contracting work as well as diversifying its business, he says.

The company has 15 employees, including executives, project managers and construction supervisors. It hires additional workers or subcontractors for individual projects.

Expanding pipeline

It will also help NARENCO to arrange financing for other developers that it can then build projects for.

“The solar market is changing so quickly that we need to have multiple ways we can be involved in it,” he says. “This is a big step for us.”

The move includes NARENCO’s first five-megawatt projects, a size that has quickly become a standard for solar developers in North Carolina. NARENCO has five now in its pipeline, all in Wayne and Duplin Counties in central eastern North Carolina.

Four are financed by the New York fund with an interest in renewable energy projects (Richter declines to identify it more specifically). The fifth has been sold to another developer, but NARENCO will be the contractor building the project.

All of those projects are expected to be completed by the first half of next year. NARENCO also has a two-megawatt project in its current pipeline of proposed projects and Richter says more are under consideration, some working with its new investor and others that it hopes to attract other investors for.

Richter says that from his perspective it is clear that out of state investors have become significantly more interested in North Carolina in the last several months. He says it is part of a natural desire to diversify their holdings, looking for strong markets beyond the perennial solar powers of California, Arizona and New Jersey.

NC rising

The Solar Energy Industries Association has just published its figures for the new solar construction in the first half of the year. North Carolina ranks fourth, behind only those three states. SEIA says that it expects North Carolina to finish the year with the fourth largest total for new construction, an improvement on last year’s fifth place finish.

And the publication Solarbuzz recently forecast that North Carolina would install 285 megawatts worth of new solar projects this year, up 80% from a year ago.

News like that has gotten noticed by investors with an appetite for investing in solar, Richter says.

Although outside investors have become more involved, Richter says the state’s 35% tax credit for solar projects remains an important tool in attracting investors. Though the state make it difficult for investors who don’t owe North Carolina taxes to take advantage of the credit, it remains a key part of the calculations that make the projects financeable.

“Solar companies need to grow to the point that we don’t need the state credit, or the federal credits either, but we are not there yet,” he says.

Manufacturing improvements that have cut the costs of panels and other hardware for projects, better construction processes and economies of scale for larger-sized projects are all bringing the project costs down, he says. And the industry needs to keep pushing them down further.

He says NARENCO looks to developing larger projects, beyond five megawatts, going forward while still building smaller projects as a contractor where it makes sense for commercial customers.

“In some projects we will take some ownership stakes, in some we will have developers come and ask if we can help with financing,” he says. “We’ve already demonstrated we can build, execute and turn on a project. We have to evolve as the market changes.”